Bad Insurance Company Behavior: A Great Example

It would probably be fair to say that the behavior, policies and practices of many insurance companies would be enough to offend the sensibilities of a large piece of driftwood. The refusal of insurers to act in good faith and in a fair and equitable manner could bring tears from a stone, but most of the time the battle remains confined to the insurer and the person or family they’re trying to run roughshod over.

Sometimes, however, when they get it wrong, the backlash is ferocious. That’s what appears to be happening in the case of the Progressive Corp. Insurance Group, which finds itself at the center of a violent storm of public protest over its attempts to avoid a $75,000 payment to the family of a client killed in a car crash in Maryland.

The insurer coldly claimed in court that they felt the June, 2010 accident which claimed the life of Kaitlynn Fisher, 24, was in fact her fault, despite huge evidence to the contrary. Almost unbelievably, Progressive interjected itself into a lawsuit Fisher’s family filed against the at-fault driver, in spite of the fact that Fisher held a Progressive policy at the time she was killed.

In effect, the insurer joined sides with the at-fault driver, who was not a Progressive client, in order to avoid paying the $75,000 claim!

Imagine the family’s surprise

When the trial of the at-fault driver began, Fisher’s family was shocked to hear a lawyer representing Progressive asked to be named as one of the defendants in the case. While technically speaking this didn’t mean the Progressive attorney was representing the other driver, it is true to say that the defense team and the Progressive lawyer did team up in their assertion that Kaitlynn was at fault for the accident.

Perhaps even more sickeningly, the witness used by Progressive and the defense to try to prove their case was a passenger in Kaitlynn’s car, who suffered a brain injury and consequent memory lapses as a result of the accident, and was unable to even give a statement for more than two months after the crash.

The facts of the case, according to an eyewitness, are these:

  • The man who witnessed the accident first hand said a black SUV sped past him, moments before the crash.
  • The SUV, which was being driven by Ronald K. Hope III, then ran a red light and crashed directly into Kaitlynn Fisher’s car
  • Fisher died within a few minutes of the crash, before she could be taken to a hospital

Progressive decided to contest the Fisher family claim, allegedly because they claimed “there were conflicting eyewitness accounts.” A cynical public feels the insurer’s apparent insistence on discovering the truth of the matter may be due more to financial reasons than moral correctness.

Why would the insurance company help the at-fault driver?

Because Hope III, the driver of the SUV that killed Kaitlynn Fisher, had very limited insurance cover, Progressive would legally be liable for the difference in the cover of Hope’s insurance policy and the level of cover of Kaitlynn’s policy. In this case:

  • Hope III was only insured for damages up to $25,000.
  • Fisher’s Progressive policy covered damages of up to $100,000.
  • Progressive’s maximum exposure in the case, therefore, was the $75,000 difference between the two policies. They could not legally be required to pay anything above that amount, but they chose to defend the case anyway. If they could prove in court that Fisher was responsible for the crash, they would save the $75,000.
  • Even Hope’s insurance company, Nationwide, had already admitted their client was responsible for the crash and had paid out the $25,000 covered under Hope’s policy to the Fisher family. In effect, Progressive was the only party in court suggesting that Kaitlynn was responsible for the crash that killed her!

The consequences of Progressive’s behavior in this case could be a loss of considerably more than $75,000, if the storm of public opinion washing over the internet is to be believed. Kaitlynn’s brother, Matt Fisher, 33, wrote on his blog that “If you are insured by Progressive and they owe you money, they will defend your killer in court in order not to pay you your policy.”

It appears as though thousands of Progressive customers are taking this message to heart and have gone online to publicly declare they will not be renewing their existing Progressive policies. In addition, their callous actions in an effort to save $75,000 by blaming an innocent victim were fruitless.

The jury in the case decided at the end of the three-day trial that Hope III was entirely to blame for Kaitlynn’s death. They awarded the Fisher family $760,000 in damages. Only $75,000 of that figure is owed by Progressive, leading many analysts to wonder what the insurer was thinking of when it decided to defend the indefensible.

When you’re in a hole, stop digging!

The avalanche of negative public sentiment caused Progressive to release a statement last week, but this seems only to have served to add fuel to the increasingly hot fire. Progressive first denied that they were representing the SUV driver who was found to be entirely at fault for the accident. To make matters even worse, Progressive refused to acknowledge that it was actually working to avoid paying out the Fisher family claim.

The public relations disaster continued unabated when Progressive chose to believe a passenger who had suffered brain damage rather than a credible, first-hand eyewitness. Then, in a shocking case of trying to appear honorable, Progressive said through spokesman Jeff Sibel that “the company respects the jury’s decision.”

When asked why the company chose to defend the case in the first place, Sibel again tried to brazen it out. “This was a complex case, and we felt at the time we had fulfilled our obligations, and that’ why we represented ourselves in court.”

Clearly, the public in general and Progressive customers in particular aren’t buying what Sibel and Progressive are trying to sell, which prompted this self-serving response from the company, via Sibel. “We’re always concerned with what our customers think. Progressive is now committed to resolving the situation with the Fisher family.”

Why did Progressive think they could get away with this?

According to the attorney representing the Fisher family, Progressive has probably been caught completely off guard by the public’s response to their actions in this case. The lawyer said it’s not actually unusual for an insurance company to go into court as an opponent of one of its own clients.

In other words, Progressive was just participating in insurance company behavior that is not that unusual, so they wouldn’t have expected the resulting public outrage.

As well as the $75,000 they have now been ordered to pay, and the potential multi-million dollar decline in revenue if existing policy holders carry out their threats not to renew, Progressive may be facing still more pain. Fisher’s lawyer says the family is considering filing a complaint against the company for failing to act in good faith. If the complaint is upheld, it could cost Progressive a lot more than $75,000.

Perhaps the final insult from Progressive came at the conclusion of the case on August 9. After promising to work closely with the Fisher family to finally resolve the $75,000 issue, they issued a final statement almost breathtakingly cynical. “This was a tragic accident, and our sympathies go out to the Fisher family,” they said.

Insurance companies are known to resort to the 3 D’s when a claim is made against them. They delay payments until the last possible instant, holding onto their money as long as they can. They deny liability for claims, even when the evidence is overwhelmingly against them. Then, in cases like this one, they defend the indefensible, and then wonder why people get upset.

If you have been in an Oregon accident and are having difficulty with a reluctant insurance company, don’t fight them on your own. An experienced Portland personal injury attorney will know precisely what to expect and how to handle your claim. And because the insurance companies know this, they are far more likely to make settlement offers that are fairer than if you go it alone. The consultation is free, so make the call and get a good lawyer on your side.